United Methodist Fund Dumps For-Profit Prison Investments

By Frederick H. Lowe
The United Methodist Church's pension agency, the General  Board of Pension and Health Benefits (GBOPHB), has divested itself of its nearly $1 million stock-investment portfolio in two companies because they derived more than 10 percent of their annual revenues from the management and operation of private prisons.

The board, which is based in Evanston, Ill., announced on Jan. 3 the sale of its stock in the GEO Group Inc., which is based in Boca Raton, Fla., and Corrections Corporation of America, which has its headquarters in Nashville, Tenn.

The board had been studying selling its shares in both companies since the Interagency Task Force on Immigration brought the issue to its attention in early 2011. The Fiduciary Committee of the board amended the Statement of Administrative Investment Policy, which governs administration of GBOPHB's investment program.

“Investments will not knowingly be made in any company or corporation in which 10 percent or more of gross revenue is derived from the management or operation of federal, state, county or municipal correctional facilities, including jails, prisons, penitentiaries, detention centers, prison camps and transfer camps,” GBOPHB board said. “Managing and or operating prison facilities will be screened out of the investment portfolio.”

The board owned $736,000 worth of stock in Corrections Corporation of America and $215,500 shares in GEO Group. The GBOPHB pension fund has more than $17 billion in assets, and it is the nation's largest church pension fund and the nation's 80th largest.

Although pension officials made the disinvestment appear to be a business deal, and it was on one level, church officials also said that owning stock in private prisons were incompatible with biblical teaching.

“It came down to that profiting from the incarceration of others was just not consistent with our view of what the [denomination's ] social principles ask for,” David Zellner, the board's chief investment officer, told the United Methodist News Service.

Marc Mauer, executive director of The Sentencing Project, called the Methodist Church's decision a very important step that may challenge other denominations to take a tough stance against the private-prison industry. The Sentencing Project is a Washington, D.C.-based organization that promotes reforms in sentencing law and practice and alternatives to incarceration.

GEO Group operates a broad range of correctional and detention facilities including maximum-, medium- and minimum-security prisons, for-profit prisons known as immigration detention centers, minimum-security detention centers and mental-health and residential-treatment facilities. Its holdings are in North America, Australia, South Africa and the United Kingdom. The company reported 2010 revenues of $1.27 billion.

Corrections Corporation of America is the largest private-corrections company in the United States, and it manages more than 66 facilities with 90,000 beds. In 2010, the company reported revenues of $1.675 billion.